The London session was the calm before the US nonfarm payroll storm. Data out of the eurozone continued to disappoint as German industrial production plunged to a horrid -12% annual run-rate in December after a -7% pace the prior month. EUR/USD held up and rallied about 40 points into the 1.28 area. Positioning ahead of the NFP number mattered more than weak data for sure. The key pivots for EUR look to be 1.2750/1.2850 and we would expect a break to either side to see that move extend. The yen crosses saw modest moves as well with USD/JPY adding 15 pips to 91.10/20 and EUR/JPY rising a more aggressive 55 points towards the 116.70/80 area. Look for volatility in these pairs to pick up markedly on the US payroll number.

The big event in London came towards the end the session with the release of Canadian employment. The report showed a massive -129K decline in payrolls for January, on the heels of a -20K slip in December and much steeper than the expected -40K result. The unemployment rate was no better as it surged to 7.2% from 6.6% and was well above the 6.8% expectation. This sent USD/CAD about 100 pips higher on the follow and the pair ended the session up more than 140 pips near the 1.2520/30 area. The surge higher stalled near the week's highs by 1.2520/40 and this looks like a good short-term barrier. Back below 1.25 should see the reversal accelerate a touch especially given that US nonfarm payrolls are expected to be dismal this morning.

Upcoming Economic Data Releases (NY Session) prev est

* 2/6 13:30 GMT US Change in Nonfarm Payrolls JAN -524K -500K

* 2/6 13:30 GMT US Unemployment Rate JAN 7.20% 7.50%

* 2/6 13:30 GMT US Change in Manufact. Payrolls JAN -149K -138K

* 2/6 13:30 GMT US Average Hourly Earnings MoM JAN 0.30% 0.30%

* 2/6 13:30 GMT US Average Hourly Earnings YoY JAN 3.70% - -

* 2/6 13:30 GMT US Average Weekly Hours JAN 33.3 33.3

* 2/6 17:00 GMT EC ECB's Gonzalez-Paramo Speaks in Granada, Spain 6-Feb

* 2/6 20:00 GMT US Consumer Credit DEC -$7.9B -$2.3B

* 2/6 22:45 GMT US Fed's Yellen Speaks in Hawaii to Bank Directors 6-Feb